We are told that artificial intelligence is a powerful tool that may end up being either the end of humanity through automated super soldiers making autonomous decisions regarding their own AI devised rules of engagement, or life saving medical procedures and diagnostic tools like House meets HAL. As usual–both outcomes are probably equally likely if humanity doesn’t keep the deus in the machina. We really don’t want them thinking “Hell is other machines.”
The question I have is how will we keep humanity around when companies like Google are hell-bent on achieving the Singularity ASAP. This is particularly true of creators–let’s not kid ourselves that the Google Books project was some altruistic motivation to build the digital library of Alexandria rather than a massive digitization project to build a large language model to train artificial intelligence through corpus machine translation. And still is. As Kurt Sutter (show runner for Sons of Anarchy) taught us about Google, “[t]he truth is, they don’t give a shit about free speech, and are the antithesis of their own mantra, ‘Don’t be evil.’” That was 2014 and boy was he right. And he still is. It’s not just Google, but Google is emblematic of Silicon Valley.
One of the lessons we learned from the 1990s is the calvary is not coming. We have to take our own steps to work both cooperatively and defensively against a tech threat. The Human Artistry Campaign and its AI Principles effort is a hopeful indicator that the creative community and its partners are coming together to get ahead of both the threat and the promise of AI.
Let’s not forget that it’s not just about us, it’s also about the fan, our “consumers” if you will. The biggest threat to creators in my view is destroying the relationship of trust that exists between fans and creators. If AI can allow a machine to impersonate a creator, that deception harms the creator, surely. But it also harms the fan.
One of the AI principles from the Human Artistry Campaign jumped out at me as addressing this vital issue:
Trustworthiness and transparency are essential to the success of AI and protection of creators.
Complete recordkeeping of copyrighted works, performances, and likenesses, including the way in which they were used to develop and train any AI system, is essential. Algorithmic transparency and clear identification of a work’s provenance are foundational to AI trustworthiness. Stakeholders should work collaboratively to develop standards for technologies that identify the input used to create AI-generated output. In addition to obtaining appropriate licenses, content generated solely by AI should be labeled describing all inputs and methodology used to create it — informing consumer choices, and protecting creators and rightsholders.
Informing consumer choices. For a moment forget the artistic integrity, forget the human intervention, forget the free riding, just for a moment because these are all vital issues, too. At the core of the AI problem is deception and that issue is as old as time. You can’t essentially deceive fans about the origin of a work and you certainly can’t build a machine that does this all the livelong day and pretend you didn’t.
In Book 2 of Plato’s Republic, he uses the legend of a magic ring that turns the bearer invisible to illustrate a dialog on the nature of justice. The ring turns the wearer invisible so that they are capable of doing all manner of things while invisible–or anonymous–that would clearly be both unjust and punishable without the ring. Plato asks if an act is unjust solely because you get caught or is it unjust regardless of whether you are hidden from sight or apprehension. Yep, those Greeks were onto this early.
Deception is not genius. At the core of our concerns about AI is keeping them honest to protect our fans and the bedrock of the creator-fan relationship. Consumers should be able to rely on the reality of what appears to be an artist’s work that it actually does come from that artist.
We do this with almost any other product or service that is placed into commerce, so why not with creative works? After all, artist rights are human rights.
We were happy to endorse the AI principles and encourage you to find out more about it at the Human Artistry Campaign or Artist Rights Watch and sign the petition.
40+ groups representing artists, performers, writers, athletes & more launch campaign for AI that supports human creativity and accomplishment
WASHINGTON, DC / AUSTIN, TX (March 16, 2023) – A broad coalition announced the launch of the Human Artistry Campaign to ensure artificial intelligence technologies are developed and used in ways that support human culture and artistry – and not ways that replace or erode it. With more than 40 members including major unions, trade associations, and policy experts representing individual creators and rightsholders from across the entire tapestry of creative endeavor, the Human Artistry Campaign is positioned to be a leading voice in the rapidly unfolding debate over the costs and benefits of different forms of AI.
The group outlined principles advocating AI best practices, emphasizing respect for artists, their work, and their personas; transparency; and adherence to existing law including copyright and intellectual property.
The campaign urges supporters to sign a petition to advance these fundamental principles.
The launch was announced at SXSW in Austin today at an event featuring voice actor and prolific songwriter Dan Navarro, GRAMMY-nominated singer-songwriter Jessy Wilson and UT Austin professor and immersive technology expert Erin Reilly – and moderated by Rob Levine, Billboard’s Deputy Editorial Director.
Core Principles for Artificial Intelligence Applicationsin Support of Human Creativity and Accomplishments
Technology has long empowered human expression, and AI will be no different.
For generations, various technologies have been used successfully to support human creativity. Take music, for example… From piano rolls to amplification to guitar pedals to synthesizers to drum machines to digital audio workstations, beat libraries and stems and beyond, musical creators have long used technology to express their visions through different voices, instruments, and devices. AI already is and will increasingly play that role as a tool to assist the creative process, allowing for a wider range of people to express themselves creatively.
Moreover, AI has many valuable uses outside of the creative process itself, including those that amplify fan connections, hone personalized recommendations, identify content quickly and accurately, assist with scheduling, automate and enhance efficient payment systems – and more. We embrace these technological advances.
Human-created works will continue to play an essential role in our lives.
Creative works shape our identity, values, and worldview. People relate most deeply to works that embody the lived experience, perceptions, and attitudes of others. Only humans can create and fully realize works written, recorded, created, or performed with such specific meaning. Art cannot exist independent of human culture.
Use of copyrighted works, and use of the voices and likenesses of professional performers, requires authorization, licensing, and compliance with all relevant state and federal laws.
We fully recognize the immense potential of AI to push the boundaries for knowledge and scientific progress. However, as with predecessor technologies, the use of copyrighted works requires permission from the copyright owner. AI must be subject to free-market licensing for the use of works in the development and training of AI models. Creators and copyright owners must retain exclusive control over determining how their content is used. AI developers must ensure any content used for training purposes is approved and licensed from the copyright owner, including content previously used by any pre-trained AIs they may adopt. Additionally, performers’ and athletes’ voices and likenesses must only be used with their consent and fair market compensation for specific uses.
Governments should not create new copyright or other IP exemptions that allow AI developers to exploit creators without permission or compensation.
AI must not receive exemptions from copyright law or other intellectual property laws and must comply with core principles of fair market competition and compensation. Creating special shortcuts or legal loopholes for AI would harm creative livelihoods, damage creators’ brands, and limit incentives to create and invest in new works.
Copyright should only protect the unique value of human intellectual creativity.
Copyright protection exists to help incentivize and reward human creativity, skill, labor, and judgment -not output solely created and generated by machines. Human creators, whether they use traditional tools or express their creativity using computers, are the foundation of the creative industries and we must ensure that human creators are paid for their work.
Trustworthiness and transparency are essential to the success of AI and protection of creators.
Complete recordkeeping of copyrighted works, performances, and likenesses, including the way in which they were used to develop and train any AI system, is essential. Algorithmic transparency and clear identification of a work’s provenance are foundational to AI trustworthiness. Stakeholders should work collaboratively to develop standards for technologies that identify the input used to create AI-generated output. In addition to obtaining appropriate licenses, content generated solely by AI should be labeled describing all inputs and methodology used to create it — informing consumer choices, and protecting creators and rightsholders.
Creators’ interests must be represented in policymaking.
Policymakers must consider the interests of human creators when crafting policy around AI. Creators live on the forefront of, and are building and inspiring, evolutions in technology and as such need a seat at the table in any conversations regarding legislation, regulation, or government priorities regarding AI that would impact their creativity and the way it affects their industry and livelihood.
About the Human Artistry Campaign: The Human Artistry Campaign was launched at SXSW 2023 for open dialogue and guidance from the united creative community in shaping the AI debate. Visit HumanArtistryCampaign.com to join.
Members include: AFL-CIO; American Association of Independent Music; American Federation of Musicians; Americana Music Association; American Photographic Artists; Artist Rights Alliance; Artist Rights Watch; ASCAP; Association of American Publishers; Authors Guild; Black Music Action Coalition; BPI; Christian Music Trade Association; Church Music Publishers Association; Concept Art Association; Department of Professional Employees, AFL-CIO; European Composer and Songwriter Alliance; Folk Alliance International; Future of Music Coalition; Georgia Music Partners; Global Music Rights; Gospel Music Association; Graphic Artists Guild; IFPI; International Federation of Actors; #IRespectMusic; Living Legends Foundation; MLB Players Association; Music Artists Coalition; Music Managers Forum – US; Music Tech Policy; Music Workers Alliance; National Music Publishers’ Association; News Media Alliance; NFL Players Association; NHL Players’ Association; Professional Photographers of America; Recording Academy; Recording Industry Association of America; Rhythm & Blues Foundation; SAG-AFTRA; SESAC, Songwriters of North America; SoundExchange and The Trichordist.
Georgia’s music advocacy coalition GMP along with artists and independent venues have been raising the alarm about a draft bill in the Georgia State Legislature that would seemingly limit ticketing fees. In reality the language of the bill makes it clear that this is simply a Trojan horse bill that seems to limit artist fan clubs, indie venues and others to sell face value non-transferable tickets to fans.
Despite what Washington DC lobbyists posing as fans might claim, I can tell you that in my experience what music fans want is face value tickets directly purchased from venues and artists. Out of necessity these tickets must be non-transferable to keep them from being scooped up by shady organized groups apparently working in concert with StubHub and others who scalp or make a market for scalpers.
The biggest contributing factor to outrageous ticket prices is not the ticketing fees, but the StubHub markup. StubHub knows that artists and venues are sick of StubHub making it impossible for fans to buy tickets at face value, that’s why they have been going from state to state, getting legislators to pass laws that block venues, promoters and especially artists from selling non-transferable tickets. In the case of Georgia draft legislation mandates that resold tickets be sold only through a “licensed broker.”
You know, like StubHub. This is lawfare.
It is not widely understood, but those pre-sales of tickets at face value by artists directly to their fans are technically resales, because artists generally buy them upfront from the concert promoters. This extraordinarily cynical bill would essentially end this long standing part of the artist-fan social contract. It is simply designed to make the state of Georgia safe for StubHub’s exploitative free-riding business model.
So how did Georgia legislators find themselves in the business of making the world safe for StubHub? Well perhaps because they thought they were doing the bidding of a grassroots organization supposedly representing fans frustrated by high ticket prices. In particular a group called Fan Freedom. (www.fanfreedom.org) has been all over the capitol pretending to speak for fans.
And this group is not limiting its efforts to Georgia. We know of four states where this “grassroots organization representing fans” is simultaneously pushing similar bills. How does a grassroots organization simultaneously push bills in Washington, Florida, California, Maryland and Georgia?
Maybe it’s not a grassroots organization.
According to publicly available sources. Fan Freedom was launched by StubHub’s then owner eBay in 2011. The stated goal was to convince lawmakers that primary sellers like Live Nation and Ticketmaster should not be allowed to place limits on ticket transferability. The astroturf group partnered with the National Consumers League to mask ticket resellers’ objections to the anti-scalping measures as “consumer opposition.”
Fan Freedom Project was initially managed by Jon Potter, a long-term political consultant who has been involved with other industry-funded astroturf efforts and founded the Digital Media Association, the trade association for Big Tech against artists and songwriters–which has been on the wrong side of every creator issue known to man or beast.
In 2019, the Tech Transparency Project reported that one group he was behind, the Connected Commerce Council (3C), was not the organic collection of small businesses it presented itself as, but effectively a front for his DiMA pals Google, Amazon, and Facebook.
Fan Freedom Project’s president since 2016 has been Chris VanDeHoef, the former the director of government relations for TicketNetwork who now runs a government relations firm called Penn Lincoln Strategies. Yet he is apparently running around the capitol intimating he represents “fans.”
In Georgia the “grassroots” Fan Freedom Project is paying big money to Cornerstone Government Affairs which is headed by Chris Carpenter who was legislative counsel to Gov Roy Barnes. I say big money because GA only requires noting of expenditures that exceed $10k and based on what they were paid by other clients its likely to be a lot more than 10k. Plus they have registered five lobbyists. Five lobbyists in a single state for a grassroots organization? That’s 1970s tobacco industry level of lobbying! And they are doing this in fives separate states simultaneously.
This year, Fan Freedom Project hired a firm called Johnson & Blanton to lobby on its behalf in Florida, where legislation was recently introduced that would require primary sellers to offer transferable tickets. While StubHub is also actively lobbying in Florida. It has retained the firm Metz, Husband & Daughton as lobbyists in Florida since 2021. This is not a grassroots operation, its industrial scale mega-corporate lobbying operation.
Artist have no problem with The State of Georgia helping fans by limiting high ticket pries and add on fees. Further most artists would be willing to accept a compromise where they offer both transferrable and non-transferable tickets at different prices. If that’s really what consumers really want. Indeed other industries, like hotels, rental cars companies and airlines offer both refundable and non refundable tickets. There is some good legislation to be made here, but first we have to be clear, the way the bill is currently written it gives StubHub a free-ride on efforts and investments of Georgia artists, venues, promoters and fans.
[Chris Castle says: It’s like the antichrist without the morals. Voice over actors are being attacked by purveyors of artificial intelligence so that the actor’s voices can be re-used without consent or compensation even if they didn’t consent or at least didn’t object. Not only that, but voices can be used to train AI to speak in a completely different context. This is way worse that Netflix composer buyouts.
Check your name/image/likeness clauses folks–voice actors will not be the only ones caught up in the AI hellscape.]
AN OPEN LETTER FROM NAVA AND THE VOCAL VARIANTS TO THE VOICE OVER COMMUNITY
AI or Synthetic Voices are on the rise. We’re a group of concerned voiceactors working with union and non-union performers alike to make sure we don’t lose our voices forever by signing away our rights to various companies. Long story short, any contract that allows a producer to use your voice forever in all known media (and any new media developed in the future) across the universe is one we want to avoid.
So we have put together some things we can all do to avoid the decimation of our industry.
[From ArtistRightsWatch: Editor Charlie sez: There are no words for the arrogance.]
Speaking on the company’s fourth quarter earnings call, Ek said certain mistakes were made after the company heavily invested in high-growth areas like podcasts, telling investors: “I probably got a little carried away and over-invested.”
Ek, who called out a shaky macroeconomic environment, emphasized the company will be tightening investments in 2023 across the board as the music streaming giant doubles down on streamlining efficiencies “with greater intensity.”
The US is still the only Western democracy that stiffs artists on royalty payments for radio airplay. Let’s fix that!
[Editor Charlie sez: Anyone who tells you that artists can’t pass legislation to get fair pay for radio play is either a charlatan or full of shit and they are not on our side of the football.]
U.S. Senators Marsha Blackburn (R-Tenn.) and Alex Padilla (D-Calif.), along with Senators Thom Tillis (R-N.C.) and Dianne Feinstein (D-Calif.), introduced the bipartisan American Music Fairness Act to ensure artists and music creators receive fair compensation for the use of their songs on AM/FM radio. This legislation will bring corporate radio broadcasters in line with all other music streaming platforms, which already pay artists for their music.
Congressmen Darrell Issa (R-Calif.) and Jerry Nadler (D-N.Y.) led the legislation in the U.S. House of Representatives.
“From Beale Street to Music Row to the hills of East Tennessee, Tennessee’s songwriters and artists have undeniably made their mark,” said Senator Blackburn. “However, while digital music platforms compensate music performers and copyright holders for playing their songs, AM/FM radio stations only pay songwriters for the music they broadcast. This legislation takes a long overdue step toward leveling the music industry playing field and ensuring creators are fairly compensated for their work.”
“California’s artists play a pivotal role in enriching and diversifying our country’s music scene, but for too long, our laws have unfairly denied them the right to receive fair compensation for their hard work and talent on AM/FM radio broadcasts,” said Senator Padilla. “As we celebrate the accomplishments of our musical artists at the Grammy Awards in Los Angeles this weekend, we must commit to treating them with the dignity and respect they deserve for the music that they produce and that we enjoy every day.”
“Protecting one’s intellectual property is the signature right of every American who dares to invent. Every artist who first picked up a drumstick, sang to their mirror, or wrote lyrics from the heart did so because they had a dream and wanted to share it with the world. I look forward to working with stakeholders and colleagues to achieve this overdue reform,” said Congressman Issa.
“The United States is an outlier in the world for not requiring broadcast radio to pay artists when playing their music, while requiring satellite and internet radio to pay,” said Chairman Nadler. “This is unfair to both artists and music providers. I’m proud to sponsor the American Music Fairness Act which would finally correct this injustice. This is what music creators want and deserve.”
“It’s clear that the movement for music fairness continues to gain momentum, bringing us closer than ever before to ending Big Radio’s ability to deny artists the fair pay they deserve. This week’s House and Senate introductions of the American Music Fairness Act is evidence of that. We thank Senators Padilla and Blackburn and Representatives Issa and Nadler for their leadership in the effort to secure economic justice for our nation’s music artists and creators, and look forward to working together to drive continued progress in the coming months,”said Congressman Joe Crowley, Chairman of musicFIRST.
“Music creators have been forced to give away their work for far too long. It is time for Congress to demonstrate that they stand behind the hard-working Americans that provide the music we all love by finally passing the American Music Fairness Act. This bill has the broad support of artists, labels, small broadcasters, unions, and others because it strikes a fair balance by respecting creators for their work and protecting truly local broadcasters. No more excuses, no more waiting in line for their turn. Music creators demand the economic justice AMFA provides,” said Michael Huppe, President and CEO of SoundExchange.
“As we prepare to focus our attention on celebrating music this weekend at the GRAMMY Awards, the Recording Academy also renews its commitment to ensuring music creators are always compensated fairly for their work. We applaud Reps. Issa, Nadler, McClintock, and Lieu and Senators Padilla, Blackburn, Feinstein, and Tillis for reintroducing the American Music Fairness Act and look forward to working with them to build on the historic progress we made last year on this important legislation,” said Harvey Mason jr., CEO of the Recording Academy.
“The American Music Fairness Act is practical compromise legislation that has already passed the House Judiciary Committee with bipartisan support last Congress. It takes a smart, calibrated approach towards solving a decades old problem in the radio industry. When enacted into law, AMFA will ensure recording artists and copyright owners are paid fairly for recorded music regardless of the technology used to broadcast it while carefully protecting small and noncommercial stations to preserve truly local radio our communities depend upon,” said Mitch Glazier, Chairman and CEO of the Recording Industry Association of America.
“For far too long, our broken and unfair system has let AM/FM radio stations — many of which are owned by just a few massive media corporations — get away with refusing to pay artists when they play their music. While these big corporate broadcast companies gobble up billions upon billions in advertising dollars, the session and background musicians, whose work makes all of it possible, receive no compensation whatsoever for their creations. It’s time to right this wrong, and the American Music Fairness Act aims to do just that. It’s vital that Congress protects the livelihoods of those who create the music we know and love,” said Ray Hair, International President of the American Federation of Musicians.
“I want to thank Congressman Jerry Nadler, Congressman Darrell Issa, Senator Alex Padilla and Senator Marsha Blackburn for their leadership on this crucial legislation. When you consider the billions of dollars the big radio corporations generate in revenue and profits, it’s shocking that recording artists, vocalists and musicians don’t receive a penny when their work is played on AM/FM radio. Since when do workers in America get exploited without pay? This is an unfair and egregious loophole especially since both streaming and digital services pay for the use of artists’ work. AM/FM radio has had a free ride for decades and it’s time to put a stop to it! I urge Congress to fix this outdated practice by passing the American Music Fairness Act,” said Fran Drescher, President of SAG-AFTRA.
“We are grateful that our champions are making it crystal clear that the fight for fairness continues in this new Congress. By reintroducing the American Music Fairness Act, Senators Blackburn and Padilla, along with Representatives Issa, Nadler, McClintock, and Lieu, as defenders of property rights and supporters of artistic expression, have put the mega broadcasting conglomerates on notice that it is time to erase their stain on America’s history,” said Dr. Richard James Burgess, President and CEO of the American Association of Independent Music.
Currently, the United States is the only democratic country in the world in which artists are not compensated for the use of their music on AM/FM radio. By requiring broadcast radio corporations to pay performance royalties to creators for AM/FM radio plays, the American Music Fairness Act would close an antiquated loophole that has allowed corporate broadcasters to forgo compensating artists for the use of their music for decades.
In recognition of the important role of locally owned radio stations in communities across the U.S., the American Music Fairness Act also includes strong protections for small, college, and non-commercial stations.
The American Music Fairness Act will positively impact artists and the music industry at large by:
Requiring terrestrial radio broadcasters to pay royalties to American music creators when they play their songs.
Protecting small and local stations who qualify for exemptions — specifically those that fall under $1.5 million in annual revenue and whose parent companies fall under less than $10 million in annual revenue overall — by allowing them to play unlimited music for less than $500 annually.
Creating a fair global market that ensures foreign countries pay U.S. artists for the use of their songs overseas.
The American Music Fairness Act is endorsed by: the AFL-CIO, the American Association of Independent Music (A2IM), the American Federation of Musicians, the Recording Academy, the Recording Industry Association of America (RIAA), SAG-AFTRA and SoundExchange.
Suzanne Wilson General Counsel and Associate Register of Copyrights U.S. Copyright Office 101 Independence Avenue S.E. Washington D.C. 20559 Re: Notice of Proposed Rulemaking: Termination Rights and the Music Modernization Act’s Blanket License Docket No. 2022-5 Comment
Dear General Counsel Wilson:
Thank you for the opportunity to make this comment on the docket referenced above.[i]
I am a music lawyer in Austin, Texas and write this comment on my own behalf only and not on behalf of anyone else.
Others will address the substantive termination issues that are well-described and assayed in the Notice, so I will focus on the procedural tension between The Mechanical Licensing Collective, Inc. (“The MLC, Inc.”) currently designated as the mechanical licensing collective (“MLC”), its officers and directors, and the law as described in the Notice.
I argue that the need for this Notice is symptomatic of a larger problem in the relationship between Congress and The MLC, Inc. I hope the Office will consider resolving this tension as it has been authorized to do under the Music Modernization Act[ii] such as through regulations establishing the type of code of conduct that is common for other federal contractors.
This tension is alarming. The Notice states the MLC “does not follow the Office’s rulemaking guidance”[iii] regarding terminations, and that The MLC, Inc. “declin[es] to heed the Office’s warning….”[iv] These disclosures are diametrically at odds with the clear intent of Congress in crafting the MLC’s role.[v]
The disclosures confirm clearly that there are governance and oversight controversies at The MLC, Inc. that in my view need to be conclusively disposed of, and quickly.[vi] These governance issues are symptomatic of what may be much greater problems with the administrative capabilities of The MLC, Inc. that may be metastasizing but have not yet risen to the level of a public inquiry.
The recklessness that gives rise to the Notice also highlights The MLC, Inc.’s general lack of accountability and suggests a conscious disregard for the Copyright Office’s oversight role on a significant matter of law that is not capable of proper resolution through any “business rules.”[vii]
I also note this troubling statement in the Notice:
But, having reviewed the MLC’s policy, the Office is concerned that it conflicts with the MMA, which requires that the MLC’s dispute policies ‘‘shall not affect any legal or equitable rights or remedies available to any copyright owner or songwriter concerning ownership of, and entitlement to royalties for, a musical work.’’[viii]
It seems clear that The MLC, Inc.’s conscious failure to comply with Congressional intent as well as the Office’s guidance is, or ought to be, a decision of some import that surely must have been taken by someone—that is, one or more persons—employed or appointed by the MLC. It seems likely to be a subject that would have been reviewed both by its General Counsel and as part of the millions in outside counsel fees[ix] spent by The MLC, Inc.
The fact that the decision-making process is not readily known is itself of concern and leads one to further consider developing a code of conduct for The MLC, Inc. to assure the Office, the Congress and the public of its administrative capabilities.
Respectfully, I request that you determine how this decision was arrived at and what internal controls The MLC, Inc. has put in place to assure the Congress, the Office and interested parties that these mistakes will not happen again. This should not be an “oh well” moment and should be taken seriously by The MLC, Inc.
If The MLC, Inc. fails to disclose what it is doing by establishing opaque “business rules”, it is essentially creating de facto regulations that have the practical effect of law or regulations made behind closed doors unless the Office or other oversight agency happens to catch them out. The public will never know that the business rule was established, how the “business rule” was arrived at, or have a meaningful opportunity to comment such as in response to this Notice.
For example, do the minutes of The MLC, Inc.’s board of directors or statutory committees reflect a discussion or vote on the adoption of the MLC’s policies on termination treatment? Did such a vote implicate any conflicts of interest? Who determined that there was or was not a conflict of interest in the MLC’s decision to adopt the termination policy, however it was taken? Were there any dissenting votes recorded? Did an officer or director of The MLC, Inc. certify the completeness of the record in these findings in the corporate minute book?
This leads to other concerns under public discussion regarding the hundreds of millions of “black box” monies being held by The MLC, Inc. Given that the public has very little information available to it regarding the results and implications of the MLC’s operational decisions, I respectfully request that you determine what, if any, financial implications have arisen as a result of The MLC, Inc.’s reckless failure to comply with the law and the guidance of the Office in implementing its termination policy. Such determination should likely include any funds[x] that The MLC, Inc. is apparently trading in the market for its own account.[xi] Any curative action required by the Office should, of course, be retroactive in scope which will require considerable before-and-after accounting disclosures.
It must be asked whether the “business rule” established for terminations increases or decreases the enormous black box which was of considerable interest to Chairman Leahy at the recent Copyright Office oversight hearing at which the Register testified.[xii] This is particularly true if the implementation of the business rule results in financial harm to interested parties who rely on The MLC, Inc. to get it right.
The subject of black box came up in the Questions for the Record from Chairman Leahy. The Copyright Office’s response to Chairman Leahy’s inquiry about the hundreds of millions in black box held by the MLC directed the Chairman to the MLC’s annual report for answers.
Respectfully, I find this odd. Chairman Leahy did not ask what the MLC told the world in its annual report; rather he asked, “What can the Copyright Office do to help ensure that the MLC is working to make sure that rightful owners of music works are identified and paid?”[xiii]The question is transitive: We have oversight of you, you have oversight of The MLC, Inc., therefore we have oversight of the MLC.
Surely no one is surprised by this. The question many have is why The MLC, Inc. itself—a quasigovernmental organization operated by inferior officers[xiv] of the United States–is not the subject of an oversight hearing at Senate Judiciary regarding the hundreds of millions it is sitting on. Maybe next time.
It must also be said that the answer to Chairman Leahy goes on:
Notably, the MLC plans to wait to process historical unmatched royalties from the Phonorecords III rate period [2018-2022] until the Copyright Royalty Judges finalize those rates in the ongoing remand proceeding and digital music providers provide adjusted reports of usage and royalty payments. It is the Office’s understanding that the bulk of historical unmatched royalties come from that period.[xv]
Without getting into the timeline of what came when, how is it exactly that The MLC, Inc. took the decision in February 2021—nearly two years ago–to sit on top of hundreds of millions of other peoples’ money that they were somehow investing under their undisclosed “Investment Policy”? Was anyone asked? Who gave the MLC the permission to do this? Do they not hold the black box corpus in trust for songwriters and copyright owners yet to be identified? Does this not compound the already painful series of failures that resulted in the black box in the first place, the delay in accounting to songwriters (or their families) under Phonorecords III remand, and still more delay while legions of lobbyists and lawyers argue over the post-remand true up accountings?
The MLC reported $2,529,910 investment income on its 2021 US Federal tax return 990
Respectfully, there is also, of course, a larger question that the Office may consider answering: If The MLC, Inc. adopts a policy or takes some action outside of the law or its remit, is that policy binding on any future entities designated by the Office as the MLC?
These are all questions that I would expect to have answers that are readily available to the public given that The MLC, Inc. is in a position of public trust administering a compulsory license on behalf of the United States and has been given great privileges under the MMA.[xvi]
Thank you again for the opportunity to comment.
Very truly yours,
Christian L. Castle
CLC/ko
[i] U.S. Copyright Office, Notice of Proposed Rulemaking, Termination Rights and the Music Modernization Act’s Blanket License 87 FR 64405 (Oct. 25, 2022) (Doc. No. 2022-5) (hereafter “Notice”).
[ii]Orrin G. Hatch-Bob Goodlatte Music Modernization Act, Public Law 115–264, 132 Stat. 3676 (2018) (“MMA”) and specifically Title I thereof.
[v]See S. Rep. 115-339 (115th Cong. 2nd Sess. Sept. 17, 2018) at 7 (“Senate Report”). (“The collective is expected to operate in a transparent and accountable manner.”)
[vi] I would hope that this failure will be weighed and measured by the Copyright Office as part of The MLC, Inc.’s quinquennial review as is required under the legislative history. See, e.g., Senate Report at 5 (“[E]vidence of fraud, waste, or abuse, including the failure to follow the relevant regulations adopted by the Copyright Office, over the prior five years should raise serious concerns within the Copyright Office as to whether that same entity has the administrative capabilities necessary to perform the required functions of the collective.”)(emphasis added).
[vii] It must be said that the MLC’s disregard for this particular matter may present a moral hazard (at best) for the publishers represented by at least some of its board members.
[x]See the MLC’s annual report stating that the MLC invests the black box according to its internal “Investment Policy” established by its board of directors but not made public. MLC 2021 Annual Report at p. 4 available at https://www.themlc.com/hubfs/Marketing/23856%20The%20MLC%20AR2021%206-30%20REFRESH%20COMBINED.pdf(“Annual Report”) (“Investment Policy: This policy covers the investment of royalty and assessment funds, respectively, and sets forth The MLC’s goals and objectives in establishing policies to implement The MLC’s investment strategy. The anti-comingling policy required by 17 U.S.C. § 115(d)(3)(D)(ix)(I)(cc) is contained in [The MLC, Inc.’s] Investment Policy. The Investment Policy was approved by the Board in January 2021.”) (emphasis added).
[xi] Realize that every CMO is confronted with the decision about what to do with the royalty float and black box, but not every CMO decides to invest these funds in the market. If they do invest the funds, it is generally the case that any trading profits, dividends or interest goes to offset the CMO’s administrative costs that otherwise would be deducted from collected royalties. However, the MLC, Inc.’s administrative costs are paid by the users of the blanket license (making the United States, I believe, the only country in history or the world that charges for the use of a statutory license). Therefore, the return on the MLC’s investment of the songwriters’ money would not be used for the same purpose as all the world’s CMOs that follow a similar practice. The continuity in ownership for profits derived from The MLC, Inc.’s trading is also unclear; if The MLC, Inc.’s existing designation is not continued but securities are being held or profits generated, what happens?
[xii]Senate Judiciary Committee, Subcommittee on Intellectual Property, Oversight of the U.S. Copyright Office, Responses to Questions for the Record by Shira Perlmutter, Register of Copyrights and Director of the Copyright Office (Sept. 7, 2022), available at https://artistrightswatchdotcom.files.wordpress.com/2022/10/qfr-responses-perlmutter-2022-09-07.pdf. (“Questions for the Record”) (“With respect to the historical, pre-2021, unmatched royalties, which were reported to be about $426 million, the annual report says that the MLC recently started distributing those that it has been able to match. It also says that the MLC has begun making associated usage data for historical unmatched royalties available to copyright owners, which will facilitate further claiming and matching.”)
[xiv] President Donald J. Trump, Statement on Signing the Orrin G. Hatch-Bob Goodlatte Music Modernization Act (October 11, 2018) available athttps://www.govinfo.gov/content/pkg/DCPD-201800692/pdf/DCPD-201800692.pdf (“Because the directors are inferior officers under the Appointments Clause of the Constitution, the Librarian must approve each subsequent selection of a new director.”)
[xvi]See, e.g., Senate Report at 5 (emphasis added). “For the responsibilities described in subparagraphs (J) [distribution of unclaimed royalties] and (K) [dispute resolution] of paragraph (3), the collective is only liable to a party for its actions if the collective is grossly negligent in carrying out the policies and procedures adopted by the Board of Directors pursuant to section 115(d)(11)(D). Since the Register has broad regulatory authority under paragraph (12) of subsection (d), it is expected that such policies and procedures will be thoroughly reviewed by the Register to ensure the fair treatment of interested parties in such proceedings given the high bar in seeking redress.”
In the age of Silicon Valley monopoly pseudo-capitalism, a tell that an organization is up to no good, is the use of the word "open." Take OpenAI. It has slathered itself in a pseudo-academic ooze, presenting papers, hosting "discussions, hoping you don't realize who really owns
OpenAI: The same Silicon Valley monopoly pseudo capitalists that have given you all the other monopoly platforms. Start with Sequoia capital. Go from there. Now it's important for the scam to present it as something that is "open" to the public as if they are creating something..
like a public park or library (one of SVs favorite Trojan horses). Because what they are really doing is taking private property (copyrights, TM, ROP) that rightfully belong to artists (big and small, professional and hobbyist) without permission and converting it to a private…
company owned by the same people who brought you the current monopoly platforms. The trick works cause commentators (especially tech journalists) willfully repeat the framing that a public good is being created. Not the next Google.
The second trick these cynical pseudo capitalist opportunists are playing is that nothing is really"owed" to creators because no one is harmed, AI is simply creating new works, based on collective Artist impulses. Really? The why can I input "in the style of Panhandle Slim"…
We’re back! David Lowery hosted the third annual Artist Rights Symposium at the University of Georgia’s Terry College in Athens on November 15 as an in-person event. The Symposium is an all-day event that allows students in the Music Business program to participate and interact with panelists as part of the music business program.
Our keynote speaker was the inspiring Merck Mercuriadis, long time songwriter advocate, manager and music industry veteran who founded and runs the Hipgnosis Songs Fund. Merck is an active songwriter advocate around the world, particularly with the recent inquiry into the music streaming economy by the UK Parliament’s Digital Culture Media & Sport Committee and the UK Competition and Markets Authority. As Kristin Robinson reported on Billboard
Merck explained why he feels the industry is in the “age of the songwriter.” “There has been a massive paradigm shift,” he said. “Forty years ago, the power was in the artist brand,” but now, most songs that top the Billboard charts are written by a larger number of songwriters than ever, meaning the demand has never been higher for good hitmakers. “But songwriters have to have a place at the negotiating table now,” he said, citing that in the United States, rates for mechanicals are set by the government’s Copyright Royalty Board, barring “free market” negotiations. “Let’s face it, [the government controlling rates] is insulting to songwriters.”
This year’s symposium topic was “The Future of Authorship and the US Copyright Office” and Merck and the stellar panelists had a lot to say about the many advocacy issues facing contemporary songwriters.
Fortunately, thanks to Terry College the symposium is available on YouTube at no charge and you can watch it in its entirety.
Welcome/Opening remarks
9:00 AM -9:10 AM David Barbe, Director, Terry College Music Business Program
Georgia Legislative Overview and Agenda 9:10 AM- 9:30 AM
Panel 1: Libraries vs Authors: The Internet Archive’s “Controlled Digital Lending” and Fair Renumeration for Authors. 9:35 AM- 10:50 AM
The Trichordist 
You must be logged in to post a comment.